Bilfinger Se · XETR:GBF
Bilfinger — Non-Deal Roadshow (November 2019)
33 slides from Bilfinger's roadshow presentation, November 2019
Slide 1: Bilfinger SE Company Presentation
Bilfinger SE Bilfinger SE Company Presentation November 2019
Slide 2: Overview
Overview
Slide 3: Bilfinger at a glance
Bilfinger at a glance Leading international industrial services provider Efficiency enhancement of assets, ensuring a high level of availability and reducing maintenance costs €4.15bn revenue Clear 2-4-6 strategy with two service lines, four regions and six focus industries thereof recurring b
Slide 4: Strategy affirmed, enhanced setup: 2 Service Lines, 4 Regions, 6 Industries
Strategy affirmed, enhanced setup 2 Service Lines, 4 Regions, 6 Industries Our ambition We engineer and deliver process plant performance 2 Service Lines 4 Regions 6 Industries • Technologies • Continental Europe • Chemicals & • Pharma & Where to play • Engineering & Maintenance • Northwest Europe P
Slide 5: 2 Service Lines: Enhanced setup for build up and build out phase
2 Service Lines Enhanced setup for build up and build out phase Technologies Engineering & Maintenance FY 2018: Revenues €503m, EBITA adj. €-26m FY 2018: Revenues €3,477m, EBITA adj. €134m Market Market High growth potential for technological products esp. in Increasing demand in Engineering Mainten
Slide 6: Technologies: ambition to grow higher-margin business
2 Service Lines Technologies: ambition to grow higher-margin business Tech- Scrubber Pharma & Nuclear nology biopharma Services expertise Descrip- • High demand driven by legis- • Ageing society and global rise of • Worldwide build programs tion lation on emissions and CO2 middle class drives new pr
Slide 7: Engineering & Maintenance: combined and full life cycle services driving value
2 Service Lines Engineering & Maintenance: combined and full life cycle services driving value Tech- Combined Bilfinger Corrosion nology strength Turnaround under Concept insulation Descrip- • €36m deodorization plant for • High risk events for customers – • Major root cause of process tion Fluxys s
Slide 8: Bilfinger Turnaround Concept (BTC)
Bilfinger Turnaround Concept (BTC) No. 1 provider in Europe for turnarounds in the process industry Profitability driver for E&M also in 2020 & 2021 BTC: • Ability to ramp up/down large number of 250 >€200m qualified personnel • Minimize outage • Asset long-term integrity assurance ~€200m 200 • Deca
Slide 9: Craft labor supply/demand inversion driving Bilfinger's market dynamics
Craft labor supply/demand inversion driving Bilfinger’s market dynamics 70000 Unfilled 60000 apprentice ▪ Supply side 50000 positions 40000 in Germany* shortage Quality, 30000 expectations competence & 20000 10000 ▪ “War for talents” certification 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 201
Slide 10: Digital Next: Strategic position
Digital Next: Strategic position Bilfinger is well positioned to be the frontrunner in the IoT of process industries Process Industry Bilfinger IT Industry Digitalization hurdles Building digital bridges Applicability deficits • Requirement to • Deep knowledge of customer needs and • No access to pl
Slide 11: Compliance Management System: A competitive advantage
Compliance Management System A competitive advantage Certified by compliance monitor in December of 2018 Deferred Prosecution Agreement (DPA) concluded Prevent Compliance system is industry leading Prävention Compliance-related activities are ongoing, Compliance Reaktion is an integral part of syste
Slide 12: Improving our financial performance
Improving our financial performance
Slide 13: We will address all P&L line-items
We will address all P&L line-items GROSS MARGIN • Growth opportunities in high-profitability areas • LOA1) process and Project management Impact on gross margin: improvement of ~200bps AMBITION 2) ADDRESSING BOTH LINE ITEMS EBITA margin • Process and IT harmonization • Procurement increase of ~500bp
Slide 14: SG&A ratio shows positive trend
SG&A ratio shows positive trend Adjusted SG&A expenses [€ m] Highlights • SG&A ratio continues to 92 94 move towards target level 87 90 89 91 86 84 76 • Streamlining of processes SG&A • Reduction of complexity in expenses structures, organization and [€ m] governance • Adjustment of admin headcount
Slide 15: Preparing the ground for the build-out phase
Preparing the ground for the “build-out phase”: Leaner processes, less regulation – focus on value generation Significant margin improvement expected in 2020 ▪ Gross margin improvement remains major focus: Execution improvement Disciplined hurdle rates for future contracts ▪ Additional net SG&A
Slide 16: Additional working capital improvement initiatives
Additional working capital improvement initiatives Targeting ~85% of trade receivables and WIP in a category-specific approach Reporting and Management information Awareness, Education and Coaching ▪ Develop and implement reporting improvements: ▪ Roll-out E-learning on working capital management ag
Slide 17: Guidance 2019, Targets 2020 and Wrap-up
Guidance 2019, Targets 2020 and Wrap-up
Slide 18: Markets: E&M Europe
Markets: E&M Europe Industries %* Trend • Overall positive outlook in E&M Oil & Gas driven by gas infrastructure buildout and input terminals / LNG projects Oil & Gas 25% • Strong demand for offshore maintenance, turnaround projects and decommissioning • Stable market development with turnaround opp
Slide 19: Markets: E&M International
Markets: E&M International Industries %* Trend • Aging installations based in ME fuel demand for brownfield CAPEX Oil & Gas 15% projects for rehabilitation, upgrades & repair • Mid-stream gas investments in NA continue but the pace has slowed • Focus on OPEX optimization to support refining margins
Slide 20: Markets: Technologies
Markets: Technologies Industries %* Trend • Modification and modernization requirements of European gas Oil & Gas 10% distribution systems • Debottlenecking opportunities in refining • Energy transition focus in all our regions, esp. Europe and USA • Nuclear demand for new builds and maintenance inc
Slide 21: Outlook 2019 reaffirmed, significant margin improvement in 2020
Outlook 2019 reaffirmed, significant margin improvement in 2020 Actual Expected Indications in € million FY 2018 FY 2019 FY 2020 (organic) Revenue 4,153 Mid single-digit organic growth Stable with focus on higher margins Significant increase to more than EBITA adjusted 65 ~4% margin €100m Free Cash
Slide 22: Bilfinger 2020: Build up phase on track / Build out phase starts in 2020
Bilfinger 2020 Build up phase on track / Build out phase starts in 2020 Capital Markets Day February 13, 2020 Value Stabilization Build up Build out • Strategy defined • Top line growth resumed • Process and System • Organization announced • First successes in new growth areas harmonization
Slide 23: The Bilfinger Investment Case
The Bilfinger Investment Case: Turnaround case based on favorable business model Structural demand for industrial Favorable business Financial soundness services characteristics • BB / stable outlook • ~55% of output in recurring • 35% equity ratio (as of Dec 31, • Increasing # of Industrial plants
Slide 24: Financials Q3 2019
Financials Q3 2019
Slide 25: Q3 2019: Bilfinger making steady progress, streamlining management structure
Q3 2019: Bilfinger making steady progress, streamlining management structure Market: underlying markets stable Orders received: timing issues Revenue: continued growth Adjusted EBITA: significant year-on-year improvement Technologies improved sequentially, but still negative Reported net profit: pos
Slide 26: Stable orders received in E&M, Technologies with significant decrease
Stable orders received in E&M, Technologies with significant decrease due to project timing and current strong focus on execution Development of orders received -10%/-7% • Orders received 1,105 1,114 1,133 Decrease (-10% / org.: -7%) due 971 997 670 765 798 to project timing in UK and US Orders 748
Slide 27: Revenue growth remains positive; significant improvement in adjusted EBITA
Revenue growth remains positive; significant improvement in adjusted EBITA Development of revenue and profitability • Revenue +5%/+7% +5% increase (org.: +7%) due to 1,115 1,147 1,101 good market demand 1,052 1,008 Revenue • Adjusted EBITA (€ million) 3.3% -0.4% 3.1% 2.1% Increased to €34 million 1.
Slide 28: Gross margin improvement to 10.2%
Gross margin improvement to 10.2% Adjusted SG&A ratio of 7.6% dipping below run-rate of 8.2% Adjusted gross profit (€ million) Adjusted selling and administrative expenses (€ million) 112 100 97 (10.2%) (9.5%) (8.5%) 0 5 11 5 0 0 -95 -102 -89 112 (-9.1%) (-8.9%) (-8.1%) 100 97 (10.2%) (9.5%) (8.5%)
Slide 29: Segment E&M Europe: continued sound performance
Segment E&M Europe: continued sound performance Development of revenue and profitability • Orders received -1%/+1% -2% below prior-year quarter 710 (org.: +0%), major framework 695 705 688 635 contracts to be prolonged in Q4 / Revenue currently not reflected in orders 5.3% (€ million) 4.0% 4.7% rece
Slide 30: Segment E&M International: strong revenue growth, considerable margin improvement
Segment E&M International: strong revenue growth, considerable margin improvement Development of revenue and profitability • Orders received +25%/+20% +2% (org.: -3%) slightly above prior- 267 year quarter based on project 222 238 expansions Revenue 213 191 (€ million) 10.5% • Book-to-bill: 0.9; <1
Slide 31: Segment Technologies: sustained positive revenue trend
Segment Technologies: sustained positive revenue trend, sequentially improving but negative adjusted EBITA, positive Q4 expected Development of revenue and profitability • Orders received -61% (org.: -62%) below prior-year 145 145 quarter due to project timing and the 128 136 careful selection of ne
Slide 32: Operating and free cash flows positive and above prior year
Operating and free cash flows positive and above prior year DSO improved y-o-y with higher portion of receivables already invoiced Adjusted Adjusted operating cash flow1) (€ million) Net profit (€ million) net profit (€ million) 6 33 17 15 6 Adjust- 12 1 ments 11 Continuing operations 18 -1 1 Report
Slide 33: Disclaimer
Disclaimer This presentation has been produced for support of oral information purposes only and contains forward- looking statements which involve risks and uncertainties. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectation